Valuing Ecosystem Services in Terms of Ecological Risks and Returns

Abstract: The economic valuation of ecosystem services is a key policy tool in stemming losses of biological diversity. It is proposed that the loss of ecosystem function and the biological resources within ecosystems is due in part to the failure of markets to recognize the benefits humans derive from ecosystems. Placing monetary values on ecosystem services is often suggested as a necessary step in correcting such market failures. We consider the effects of valuing different types of ecosystem services within an economic framework. We argue that provisioning and regulating ecosystem services are generally produced and consumed in ways that make them amenable to economic valuation. The values associated with cultural ecosystem services lie outside the domain of economic valuation, but their worth may be expressed through noneconomic, deliberative forms of valuation. We argue that supporting ecosystem services are not of direct value and that the losses of such services can be expressed in terms of the effects of their loss on the risk to the provision of the directly valued ecosystem services they support. We propose a heuristic framework that considers the relations between ecological risks and returns in the provision of ecosystem services. The proposed ecosystem‐service valuation framework, which allows the expression of the value of all types of ecosystem services, calls for a shift from static, purely monetary valuation toward the consideration of trade‐offs between the current flow of benefits from ecosystems and the ability of those ecosystems to provide future flows.     

Valuing eco-assets: A note on valuation methods

SUMMARY

The valuation of eco-assets should take into account the perceptions and judgments of the public. However, the value of eco-assets based on conventional calculations has often been unreliable as a result of differing situations and individuals involved. Therefore, a reasonable and efficient method for valuing eco-assets is needed. In this paper, a brief summary of the history of valuing eco-assets is provided, followed by a summary of conventional methods of valuation. This summary of the currently used methods revealed that they do not take into account the effect of the stage and development of the population determining the value of the eco-assets. Therefore, we have developed a social development stage coefficient (l), based on Engel's coefficient. A new valuation method was then created by integrating the development stage coefficient (l) with a conventional model. Finally, possible future strategies for valuing eco-assets are discussed.     

基于不同评估方法的养殖池塘富营养化环境成本研究——以上海青浦地区常规鱼类养殖池塘为例

采用物料平衡法、置换成本法、条件价值评估法（CVM）和COD价格法对池塘养殖环境成本进行评估。结果显示,基于4种评估方法估算得到的池塘养殖环境成本由大到小依次为置换成本法（4 400元.a-1.hm-2）、COD价格法（4 191.99元.a-1.hm-2）、物料平衡法（3 925.76元.a-1.hm-2）和CVM法（2 007.8元.a-1.hm-2）,认为在不考虑时间和经济成本的前提下,基于COD价格法测算得到的结果可能最接近于环境成本的真实值。采用4种评估方法测得的环境成本占常规鱼类养殖经济总收益的6%～14%,表明采取相关措施防治水产养殖环境污染很有必要。     

Quantifying Preferences for the Natural World Using Monetary and Nonmonetary Assessments of Value

Given that funds for biodiversity conservation are limited, there is a need to understand people's preferences for its different components. To date, such preferences have largely been measured in monetary terms. However, how people value biodiversity may differ from economic theory, and there is little consensus over whether monetary metrics are always appropriate or the degree to which other methods offer alternative and complementary perspectives on value. We used a choice experiment to compare monetary amounts recreational visitors to urban green spaces were willing to pay for biodiversity enhancement (increases in species richness for birds, plants, and aquatic macroinvertebrates) with self‐reported psychological gains in well‐being derived from visiting the same sites. Willingness‐to‐pay (WTP) estimates were significant and positive, and respondents reported high gains in well‐being across 3 axes derived from environmental psychology theories (reflection, attachment, continuity with past). The 2 metrics were broadly congruent. Participants with above‐median self‐reported well‐being scores were willing to pay significantly higher amounts for enhancing species richness than those with below‐median scores, regardless of taxon. The socio‐economic and demographic background of participants played little role in determining either their well‐being or the probability of choosing a paying option within the choice experiment. Site‐level environmental characteristics were only somewhat related to WTP, but showed strong associations with self‐reported well‐being. Both approaches are likely to reflect a combination of the environmental properties of a site and unobserved individual preference heterogeneity for the natural world. Our results suggest that either metric will deliver mutually consistent results in an assessment of environmental preferences, although which approach is preferable depends on why one wishes to measure values for the natural world. Preferencias de Cuantificación para el Mundo Natural Usando Estudios de Valor Monetario y No Monetario.     

Integration of different environmental valuation methods to estimate forest degradation in arid and semi-arid regions

Many factors are aggravating desertification and degradation of forests such as urbanization, droughts, exploitation of natural resources and climate change. The study aims at estimating and assessing the degradation of forests in arid and semi-arid regions. This task however is complicated since the impact of the degradation will be in different forms such as loss of wood, soil erosion and lost recreational areas. Nevertheless the dynamic impact of the degradation is increasing the complexity of analysis since forest once lost is a reduction of value for all subsequent years. This study is considering the value of damages over time and it is using the concept of three environmental valuation methods to estimate the whole impact of the degradation: the habitat equivalency analysis (HEA), the productivity method and the benefit transfer method. The methods were applied to specific values of forests, depending on the best applicability, and the results combined to an overall value loss. The costs are calculated based on the year 2014 with two time horizons: 30 and 100 years. To apply the valuation approach, Jordan as an arid and semi-arid country is chosen. The result shows that the annual costs of environmental degradation of Jordanian forest areas equal about 0.14% of GDP in 2013, proving the enormous value lost to forest degradation or deforestation. The valuation approach can be transferred to other arid or semi-arid areas and stimulate forest conservation activities to prevent further degradation and to save the forest ecosystem services for the future.     

What can we learn from benefit transfer errors? Evidence from 20 years of research on convergent validity

We develop a nonparametric approach to meta-analysis and use it to identify modeling decisions that affect benefit transfer errors. The meta-data describe the results from 31 empirical studies testing the convergent validity of benefit transfers. They evaluated numerous methodological procedures, collectively reporting 1071 transfer errors. Our meta-regressions identify several important findings, including: (1) the median absolute error is 39%; (2) function transfers outperform value transfers; (3) transfers describing environmental quantity generate lower transfer errors than transfers describing quality changes; (4) geographic site similarity is important for value transfers; (5) contingent valuation generates lower transfer errors than other valuation methods; and (6) combining data from multiple studies tends to reduce transfer errors.     

Coping with complex and dynamic systems. An approach to a transdisciplinary understanding of coastal zone developments

Complexity and uncertainty play important roles in coastal management. Economic development may push the coastal system beyond its resilience thresholds as a result of interactions between environmental and socio-economic processes. The concepts in this paper link processes of system change, natural evolutionary processes observed in coastal zones, to processes of social evolution. An indicator based on calculating an ecological footprint for coastal zones is presented to guide decision-making in spatial and economic planning. The suggested indicator may support a range of methods linking economic valuation and environmental impact analysis.     

Teil II: Verfahren zur Monetarisierung von Ökosystemleistungen

As it is practically impossible in an industrial society to reduce impacts into ecosystems to a level that would preclude any damages, the need for damage valuation arises. One of the available valuation tools is the economic approach. Subsequent publications present this approach using the example of soils. In this second part, two methods are presented for monetarising ecosystem services, the contingent valuation method, the valuation on the basis of restoration and replacement costs. Common arguments against the monetarisation of ecosystems, like the omission of intrinsic values or the incomplete information of individuals, are then discussed. In conclusion, limits and possibilities of monetarising ecosystem services are described.     

Ökonomische Ansätze zur Ökosystembewertung am Beispiel des Bodens

As it is practically impossible in an industrial society to reduce impacts into ecosystems to a level that would preclude any damages, the need for damage valuation arises. One of the available valuation tools is the economic approach. Subsequent publications present this approach using the example of soils. In the first part, soils as part of ecosystems are considered from an ecological and a conventional economic point of view. In the following so-called ecological-economic perspective, more recent developments in economic valuation research are introduced. It is shown how ecological and economic valuation can complement one another. It is emphasized that economic valuations should be restricted to a critical soil structure which, in economic terms, is determined by the non-substitutable services of the ecological asset.     

Five challenges to reconcile agricultural land use and forest ecosystem services in Southeast Asia

Southeast Asia possesses the highest rates of tropical deforestation globally and exceptional levels of species richness and endemism. Many countries in the region are also recognized for their food insecurity and poverty, making the reconciliation of agricultural production and forest conservation a particular priority. This reconciliation requires recognition of the trade‐offs between competing land‐use values and the subsequent incorporation of this information into policy making. To date, such reconciliation has been relatively unsuccessful across much of Southeast Asia. We propose an ecosystem services (ES) value‐internalization framework that identifies the key challenges to such reconciliation. These challenges include lack of accessible ES valuation techniques; limited knowledge of the links between forests, food security, and human well‐being; weak demand and political will for the integration of ES in economic activities and environmental regulation; a disconnect between decision makers and ES valuation; and lack of transparent discussion platforms where stakeholders can work toward consensus on negotiated land‐use management decisions. Key research priorities to overcome these challenges are developing easy‐to‐use ES valuation techniques; quantifying links between forests and well‐being that go beyond economic values; understanding factors that prevent the incorporation of ES into markets, regulations, and environmental certification schemes; understanding how to integrate ES valuation into policy making processes, and determining how to reduce corruption and power plays in land‐use planning processes.     

Confronting Uncertainty and Missing Values in Environmental Value Transfer as Applied to Species Conservation

Abstract: The nonuse (or passive) value of nature is important but time‐consuming and costly to quantify with direct surveys. In the absence of estimates of these values, there will likely be less investment in conservation actions that generate substantial nonuse benefits, such as conservation of native species. To help overcome decisions about the allocation of conservation dollars that reflect the lack of estimates of nonuse values, these values can be estimated indirectly by environmental value transfer (EVT). EVT uses existing data or information from a study site such that the estimated monetary value of an environmental good is transferred to another location or policy site. A major challenge in the use of EVT is the uncertainty about the sign and size of the error (i.e., the percentage by which transferred value exceeds the actual value) that results from transferring direct estimates of nonuse values from a study to a policy site, the site where the value is transferred. An EVT is most useful if the decision‐making framework does not require highly accurate information and when the conservation decision is constrained by time and financial resources. To account for uncertainty in the decision‐making process, a decision heuristic that guides the decision process and illustrates the possible decision branches, can be followed. To account for the uncertainty associated with the transfer of values from one site to another, we developed a risk and simulation approach that uses Monte Carlo simulations to evaluate the net benefits of conservation investments and takes into account different possible distributions of transfer error. This method does not reduce transfer error, but it provides a way to account for the effect of transfer error in conservation decision making. Our risk and simulation approach and decision‐based framework on when to use EVT offer better‐informed decision making in conservation.     

Towards a co-evolutionary framework for implementing sustainable development

SUMMARY

A quantitative method which can be used to gauge the sustainability of existing socio-cultural, economic and environmental constructs is proposed. An underlying assumption of the approach is that a co-evolutionary relationship exists between social, cultural, economic and environmental systems and that these cannot be addressed in a reductionist and deterministic manner. The method focuses on both broad trends and patterns of variance in a multivariate data matrix, it allows the identification of dominant trends as well as underlying tensions, does not treat socio-cultural, economic and environmental heterogeneity as statistical noise and can be applied at different administrative scales. Furthermore, it may be used to identify potential sources of human insecurity, factors that may affect the probability of positive human survival, developmental patterns at odds with the established values system of civil society that can be targeted for political action, and to inform public debate. In addition, the method can be used to identify unexpected synergies between variables and may serve as an early warning system for regional planners.     

Difference in the net value of ecological services between natural and artificial forests in China

Land degradation is a global problem that seriously threatens human society. However, in China and elsewhere, ecological restoration still largely relies on a traditional approach that focuses only on ecological factors and ignores socioeconomic factors. To improve the effectiveness of ecological restoration and maximize its economic and ecological benefits, a more efficient approach is needed that provides support for policy development and land management and thereby promotes environmental conservation. We devised a framework for assessing the value of ecosystem services that remain after subtracting costs, such as the opportunity costs, costs of forest protection, and costs for the people who are affected by the program; that is, the net value of ecosystem services (NVES). To understand the difference between the value of a resource and the net value of the ecosystem service it provides, we used data on VES, timber sales, and afforestation costs from China's massive national afforestation programs to calculate the net value of forest ecosystem services in China. Accounting for the abovementioned costs revealed an NVES of ¥6.1 × 10¹² for forests in 2014, which was 35.9% less than the value calculated without accounting for costs. As a result, the NVES associated with afforestation was 55.9% less than the NVES of natural forests. In some regions, NVES was negative because of the huge costs of human-made plantations, high evapotranspiration rates (thus, high water opportunity costs), and low forest survival rates. To maximize the ecological benefits of conservation, it is necessary to account for as many costs as possible so that management decisions can be based on NVES, thereby helping managers choose projects that maximize both economic and ecological benefits.     

Interpreting measures of economic loss: Evidence from contingent valuation and experimental studies

From the standpoint of conventional welfare theory, it is surprising that responses to contingent valuation studies of environmental goods have shown a consistent difference between willingness to pay and compensation demanded measures of economic loss. This paper examines these results in light of four reasons most often given as grounds for their dismissal. New experimental evidence supports an interpretation of the observed disparity in payment-and compensation-based measures as both real and psychologically meaningful. An alternative conceptual framework, suggested by prospect theory, is outlined and its relevance for economic assessments of potential environmental change is discussed briefly.     

Valuing non-market benefits derived from allotments in southeast England: A contingent valuation study

The English derive a wide range of values from allotments, but nearly 35% of allotments have disappeared in the last 20 years. The real value of allotments has probably been underestimated. The contingent valuation method (CVM) was used to give a monetary value to benefits derived from allotments by allotment holders and local residents. The study was conducted in southeast England (Wye and Ashford, Kent and Greater London). A postal survey with open-ended questions was filled in by 124 allotment holders and 74 residents. Respondents were asked to express their maximum willingness to pay for allotments (WTP) and the minimum willingness to accept (WTA) compensation for loss of allotments. The mean annual WTP for keeping allotments of allotment holders were £78.93, £35.64 and £79.43, and for local residents were £41.66, £46.14 and £283.57, in Wye, Ashford and London, respectively. The allotment holders' WTP was strategically more than WTA compensation and they were only willing to pay rent for using allotments, not for retaining them.     

JEEM and Non-market Valuation: 1974–1998

This paper considers whether the Journal of Environmental Economics and Management (JEEM) has had impact on the development and applications of the methods used to estimate economic values for non-marketed environmental resources. Journal editors control the research dialogue in a discipline and as a result have the potential to influence its scope and direction. At least four areas of research have been influenced by JEEM, the theory and practice of contingent valuation, the use of preference restrictions in valuation, the development and application of corner solution models, and the role of substitution between environmental resources for valuation.     

Evaluating whether nature's intrinsic value is an axiom of or anathema to conservation

That at least some aspects of nature possess intrinsic value is considered by some an axiom of conservation. Others consider nature's intrinsic value superfluous or anathema. This range of views among mainstream conservation professionals potentially threatens the foundation of conservation. One challenge in resolving this disparity is that disparaging portrayals of nature's intrinsic value appear rooted in misconceptions and unfounded presumptions about what it means to acknowledge nature's intrinsic value. That acknowledgment has been characterized as vacuous, misanthropic, of little practical consequence to conservation, adequately accommodated by economic valuation, and not widely accepted in society. We reviewed the philosophical basis for nature's intrinsic value and the implications for acknowledging that value. Our analysis is rooted to the notion that when something possesses intrinsic value it deserves to be treated with respect for what it is, with concern for its welfare or in a just manner. From this basis, one can only conclude that nature's intrinsic value is not a vacuous concept or adequately accommodated by economic valuation. Acknowledging nature's intrinsic value is not misanthropic because concern for nature's welfare (aside from its influence on human welfare) does not in any way preclude also being concerned for human welfare. The practical import of acknowledging nature's intrinsic value rises from recognizing all the objects of conservation concern (e.g., many endangered species) that offer little benefit to human welfare. Sociological and cultural evidence indicates the belief that at least some elements of nature possess intrinsic value is widespread in society. Our reasoning suggests the appropriateness of rejecting the assertion that nature's intrinsic value is anathema to conservation and accepting its role as an axiom. Evaluar si el Valor Intrínseco de la Naturaleza es un Axioma o un Anatema para la Conservación     

Measuring marginal willingness to pay using conjoint analysis and developing benefit transfer functions in various Asian cities

We need a consistent methodology to measure the co-benefits of climate change mitigation across Asian countries. This study chose a strategy of modifying the Japan-specific life-cycle impact assessment method based on endpoint modeling (LIME) for wider application across countries. LIME has two dimensions. First, it is an environmental science that links the cause-and-effect chain. Second, it is an environmental valuation that weighs four endpoint damages in monetary terms through a conjoint analysis that is derived from an Internet-based questionnaire survey. This article describes the modification of the methodology for application of the conjoint analysis to weigh environmental impacts. We approached the investigation as follows. First, we conducted Internet surveys to measure marginal willingness-to-pay (MWTP). We used a sample of 112 respondents in their 20 s to 40 s, divided equally between men and women, in 11 cities across China, India, and Southeast Asia. The results obtained showed clear statistical significance and were comparable across the cities. Second, we attempted to develop functions (called benefit transfer functions) to simplify the measured MWTP in order to apply it across different Asian countries. The functions were derived through a stepwise meta-analytic method, a type of multiple regression analysis whose independent variable was MWTP and dependent variables were attributes of both respondents and surveyed cities. The functions showed that coal consumption and percentage of nature reserve were dependent variables. Then, the MWTPs estimated from the functions were compared with the measured MWTP for transfer error, which is calculated by the absolute value of the difference between the estimated value and the measured value divided by the latter. The transfer error was below 50% in about 90% of the 44 results (a combination of four endpoints and 11 cities), implying that the developed functions were statistically significant.     

Bayesian entropy for spatial sampling design of environmental data

We develop a spatial statistical methodology to design national air pollution monitoring networks with good predictive capabilities while minimizing the cost of monitoring. The underlying complexity of atmospheric processes and the urgent need to give credible assessments of environmental risk create problems requiring new statistical methodologies to meet these challenges. In this work, we present a new method of ranking various subnetworks taking both the environmental cost and the statistical information into account. A Bayesian algorithm is introduced to obtain an optimal subnetwork using an entropy framework. The final network and accuracy of the spatial predictions is heavily dependent on the underlying model of spatial correlation. Usually the simplifying assumption of stationarity, in the sense that the spatial dependency structure does not change location, is made for spatial prediction. However, it is not uncommon to find spatial data that show strong signs of nonstationary behavior. We build upon an existing approach that creates a nonstationary covariance by a mixture of a family of stationary processes, and we propose a Bayesian method of estimating the associated parameters using the technique of Reversible Jump Markov Chain Monte Carlo. We apply these methods for spatial prediction and network design to ambient ozone data from a monitoring network in the eastern US.     

Comparative assessment of sustainable development in South American countries on the basis of the Sustainable Society Index

This study reports an overview of the economic, social and environmental performance of the main South American countries (SAC) as measured by the Sustainable Society Index. This is a well-known composite indicator, composed of 21 indicators, grouped in seven categories, covering environmental, social and economic wellbeing dimensions. Thirteen European countries recently incorporated into the European Union (NEUC) are considered as a reference. The study covers the period 2006–2016. The South American Region features significant natural resources and plays an important role in the global economy. However, there is concern about the long-term sustainability of social and economic development, given the high rate of economic growth based on the production of low added-value primary products. Sustainable development requires reasonable balance between economic, social and environmental performance, as well as a sustained and balanced increase in performance associated with those fundamental dimensions. Moreover, it is important to agree on minimum performance levels for all performance indicators, taking into account particular social, economic and environmental realities. SAC feature a clear imbalance in some categories affecting the economic, social and environmental wellbeing dimensions, showing either stagnation or significant decrease in recent years. It can be concluded that in the light of findings reported here, South American countries are far from being on the pathway towards sustainable development.